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How Accurate is Your "Zestimate" ?

This LA Times article about Zillow estimates is from a year ago, but it recently resurfaced on my social media pages and seems worth sharing. For homeowners, Zillow seems like the best thing since sliced bread. A do-it-yourself tool to determine home values. Unfortunately, it's not the last word in valuation and is often controversial.

Zillow uses an Automated Valuation Model  (AVM), which is an algorithm that takes into account location, price per sqft, lot size, etc by relying on publicly available data from comparable properties. Sometimes this data is old or just simply wrong.  It's not a bad system for very general ideas about home value, but it doesn't account for anything unusual (good or bad) about your home.  AVMs tend to overstate the value of homes that are in poor condition or in an awkward location (like next to a gas station).  Similarly, they understate the value of homes that have fabulous recent renovations or are walkable to the NYC train.  It's a little like the real estate equivalent of an automated telephone customer service system. It's good for only the most basic information gathering.

And, as this article points out, "Zestimates" aren't even especially accurate - on average they are off by 8%.

Working with an experienced agent (i.e., me!), you'll have access to all the same type of automated information available through Zillow AND the expertise of someone who knows what the inside of the comp homes look like.  So, together, we can make a smart marketing plan if you're a seller, and realistic decisions about bidding if you're a buyer.

I'm happy to come over and tell you what your home is worth. Buying and selling homes is nuanced and subjective. It's not about algorithms. It's about lifestyles and dreams.

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